Chubu Electric Power Company,incorporated · TSE:9502

Chubu Electric Power Company,incorporated — FY2016 Earnings Presentation

52 slides from Chubu Electric Power Company,incorporated's earnings presentation, May 2017

1. Slide 1: Investors Meeting for Fiscal Year ended March 31, 2017

   Investors Meeting for Fiscal Year ended March 31, 2017 May, 2017

2. Slide 2: Index

   INDEX 01 Outline of Financial Results for Fiscal Year ended March 31, 2017 Summary of Financial Results ҩҩҩҩҩҩҩҩҩҩҩҩҩҩҩ01 Electricity Sales Volume ҩҩҩҩҩҩҩҩҩҩҩҩҩҩҩ04 Generated and Received Power ҩҩҩҩҩҩҩҩҩҩҩҩҩҩҩ05 (Reference) Impact of accrued income incurred by fuel cost adjustment system (Result) ҩҩ

3. Slide 3: Outline of Financial Results for Fiscal Year ended March 31, 2017

   01 Outline of Financial Results for Fiscal Year ended March 31, 2017 Note: The Company’s fiscal year (FY) is from April 1 to March 31 of the following year. FY2016 represents the fiscal year begun on April 1, 2016, and ended on March 31, 2017. Copyright © CHUBU Electric Power Co.,Inc. All Right Rese

4. Slide 4: Summary of Financial Results <1>

   01 Summary of Financial Results <1> „ Operating revenues (Consolidated and Non-consolidated) decreased for two consecutive years since FY2015. „ Ordinary income (Consolidated and Non-consolidated) decreased following FY2013, for the first time in 3 years. (We posted a deficit in FY2013.) „ [Consolid

5. Slide 5: Summary of Financial Results <2>

   02 Summary of Financial Results <2> <Consolidated operating revenues> „ Operating revenues decreased by 250.5 billion yen compared with FY2015, mainly due to a decrease in electricity sales revenues resulting from a decrease of fuel cost adjustment charge. [Factors contributing to change in Consolid

6. Slide 6: Summary of Financial Results <3>

   03 Summary of Financial Results <3> <Consolidated ordinary income> „ Consolidated ordinary income decreased by 134.1 billion yen compared with FY2015, mainly due to a reduction of accrued income incurred by fuel cost adjustment system and a decrease in fuel cost, affected by the fall of fuel price.

7. Slide 7: Electricity Sales Volume

   04 Electricity Sales Volume <Electricity Sales Volume> 凑 Amounted to 121.8TWh, almost the same as in FY2015, mainly due to a sales increase in the Tokyo metropolitan area and an increase in air conditioning demand by lower temperature in this winter, in spite of effect of switches made to other oper

8. Slide 8: Generated and Received Power

   05 Generated and Received Power <Generated and Received Power> „ Hydro : The flow rate fell short of the previous fiscal year; thus hydroelectric power output decreased by 0.5TWh. „ Interchanged, purchased Power : Decreased by 1.9TWh, mainly due to an increase in electricity sales volume to power ex

9. Slide 9: (Reference) Impact of accrued income by fuel cost adjustment system (Result)

   06 (Reference) Impact of accrued income incurred by fuel cost adjustment system (Result) <FY2015> Income 160.0 billion Average Fuel price (basis of fuel cost adjustment charge) <FY2016> Income 6.0 billion Fuel procurement price (basis of fuel cost) 2015/4 2015/10 2016/4 2016/10 2017/4 Copyright © CH

10. Slide 10: Summary of Forecast for FY2017 <1>

    07 Summary of Forecast for FY2017 <1> <Forecast> „ Operating revenues (consolidated and non-consolidated) will increase mainly due to an increase in electricity sales revenues resulting from an increase of fuel cost adjustment charge. „ Ordinary income (consolidated and non-consolidated) will decrea

11. Slide 11: Summary of Forecast for FY2017 <2>

    08 Summary of Forecast for FY2017 <2> ْPrincipal Figuresٓ (TWh,%) FY2017 FY2016 Change (Electricity sales volume) (Forecast)(A) (Result)(B) (A-B) (A-B)/B Low voltage 37.7 38.8 (1.1) (2.8) High voltage 䞉Extra-high voltage 81.6 83.0 (1.4) (1.7) Total 119.3 121.8 (2.5) (2.0) FY2017 FY2016 (Other princi

12. Slide 12: (Reference) Impact of accrued income by fuel cost adjustment system in FY2017 (Forecast)

    (Reference) 09 Impact of accrued income incurred by fuel cost adjustment system in FY2017 (Forecast) <FY2017> <FY2016> Loss Income -15.0 billion 6.0 billion Fuel procurement price (basis of fuel cost) Average Fuel price (basis of fuel cost adjustment charge) 2016/4 2016/10 2017/4 2017/10 2018/4 Copy

13. Slide 13: Profit Allocation Policy and Dividends

    Profit Allocation Policy and Dividends for the Fiscal Year under Review, 10 and the Fiscal Year to Come <Profit Allocation Policy> „ The Company will work to maintain stable dividends after taking account of financial condition and other factors, while continuously investing in building and operatin

14. Slide 14: Management Situation

    02 Management Situation Copyright © CHUBU Electric Power Co.,Inc. All Right Reserved.

15. Slide 15: Mid-term target toward achievement of "What We Aim For"

    Mid-term target toward the achievement of ‟What We Aim For” 11 (Initiatives for management issues) Chubu electric 凑 As a leading company that provides services that exceed expectations to Power Group customers ahead of our competitors, we will aim to become a ‟total “What We Aim For ” energy service

16. Slide 16: Development of high efficiency Thermal Power Plants

    㻝㻡 12 Development of high efficiency Thermal Power Plants 䛆Outline of development of Nishi-Nagoya (Reference) Development schedule Thermal Power Plant Unit No.7䛇 Output (at the generation end) 2,376 MW 2013 2014 2015 2016 2017 2018 䞉䞉䞉䞉䞉䞉 2021 (FY) Thermal efficiency (LHV basis) Approx. 62% Fuel LNG

17. Slide 17: Business Expansion of JERA

    13 Business Expansion of JERA „ TEPCO Fuel & Power, Incorporated and Chubu Electric established “JERA Co., Inc.” effective from April 30, 2015, as a new company that implements “a comprehensive alliance covering the entire energy supply chain, from upstream fuel and procurement through power generat

18. Slide 18: Expansion of total energy services

    14 Expansion of total energy services „ Taking full liberalization of entry to gas business from April 2017 as an opportunity, gas has begun to be sold to household customers in addition to conventional customers for industrial use and business use. „ With competitive procurement capacity of JERA as

19. Slide 19: Safety improvement measures on Hamaoka Nuclear Power Station <onsite>

    15 Safety improvement measures on Hamaoka Nuclear Power Station <onsite> „ Major construction works at Unit 4 have been completed excluding some construction works including re-examination of construction work details based on the situation in the field. We are presently undergoing inspections by th

20. Slide 20: Safety improvement measures on Hamaoka Nuclear Power Station <offsite>

    16 Safety improvement measures on Hamaoka Nuclear Power Station <offsite> Offsite‫ق‬outside of the power plant site‫ك‬ Mutual cooperative systems On March 7, 2017, Chubu Electric Power concluded an agreement As preparation for nuclear disasters, coordination with the on mutual technical cooperation

21. Slide 21: Efforts for development of business structure that can adapt to change of environment

    Efforts for development of business structure that can adapt to change 17 of environment 岧Reinforcement of business foundation utilizing ICT and expansion of business areas岨 „ ICT such as IoT, big data and AI will be utilized for reinforcement of business foundation, and examinations will be made fo

22. Slide 22: Reference Data (1): Financial Results

    03 Reference Data(1): Financial Results Copyright © CHUBU Electric Power Co.,Inc. All Right Reserved.

23. Slide 23: Consolidated Statements of Income

    18 Consolidated Statements of Income (Rounded down to nearest 100 million yen.) (Billion yen,%) FY2016 FY2015 Change (A) (B) (A-B) (A-B)/B Operating revenues 2,603.5 2,854.0 (250.5) (8.8) Non-operating revenues 18.4 19.3 (0.8) (4.5) Ordinary revenues 2,621.9 2,873.3 (251.3) (8.7) Operating expenses

24. Slide 24: Non-consolidated Statements of Income <1>: Operating revenues

    19 Non-consolidated Statements of Income <1>: Operating revenues (Rounded down to nearest 100 million yen.) (Billion yen,%) FY2016 FY2015 Change 岧Major factors for Change岨 (A) (B) (A-B) (A-B)/B 凑 A decrease in fuel cost Electricity sales revenues 2,027.6 2,337.8 (310.2) (13.3) adjustment charge : -3

25. Slide 25: Non-consolidated Statements of Income <2>: Operating expenses

    20 Non-consolidated Statements of Income <2>: Operating expenses (Rounded down to nearest 100 million yen.) (Billion yen,%) FY2016 FY2015 Change 岧Major factors for Change岨 (A) (B) (A-B) (A-B)/B Salaries and employee benefits 176.2 181.5 (5.3) (3.0) Fuel 614.5 805.6 (191.0) (23.7) 凑 A decrease in fue

26. Slide 26: Non-consolidated Statements of Income <3>: Net income

    21 Non-consolidated Statements of Income <3>: Net income (Rounded down to nearest 100 million yen.) (Billion yen,%) FY2016 FY2015 Change 岧Major factors for Change岨 (A) (B) (A-B) (A-B)/B Operating income 117.2 265.2 (147.9) (55.8) 凑 Electricity business : -143.2 凑 Incidental business : -4.7 Non-opera

27. Slide 27: Consolidated and Non-consolidated Financial Standing

    22 Consolidated and Non-consolidated Financial Standing (Rounded down to nearest 100 million yen.) (Billion yen) 2017.3 2016.3 Change (A) (B) (A-B) 5,412.3 5,538.9 (126.6) Assets <4,956.5> <5,065.5> <(109.0)> 3,687.5 3,901.8 (214.2) Liabilities <3,535.9> <3,697.3> <(161.3)> 1,724.7 1,637.1 87.6 Net

28. Slide 28: Electric utility operating expenses (Non-Consolidated)

    23 Electric utility operating expenses (Non-Consolidated) ‫ق‬Billion yen‫ك‬ Salaries and employee benefits Fuel Purchased power Maintenance Depreciation Other 3,000.0 2,709.7 2,638.2 (6%) 2,457.1 (7%) 2,500.0 2,297.3 (7%) 2,317.3 2,231.7 2,136.8 (9%) (8%) 2,037.3 1,982.9 (8%) 2,000.0 (9%) (7%) 1,863

29. Slide 29: Cash Flow (Consolidated)

    24 Cash Flow (Consolidated) ‫ق‬%LOOLRQ\HQ‫ك‬ Cash Flows from Operating Activities Cash Flows from Investing Activities FCF 800.0 600.0 562.4 539.1 471.9 449.7 476.8 400.0 358.8 335.0 254.4 227.6 194.0 200.0 113.6 176.8 203.7 296.7 199.2 143.7 0.0 (25.1) (70.2) (102.9) (62.8) (200.0) (215.1) (272.7)

30. Slide 30: Fund Raising

    25 Fund Raising „ We raised total approximately 1,500 billion yen in long-term funding for 3 years since the shutdown of Hamaoka Nuclear Power Station. „ We raised 390 billion yen in long-term funding in FY2016. „ We plan to raise approximately 400 billion yen in long-term funding in FY2017. 900.0 (

31. Slide 31: Financial Ratio, Credit Ratings

    26 Financial Ratio, Credit Ratings 岧Shareholders’ equity ratio岨 岧Debt-Equity ratio岨 Times 35.0 3.0 Non-Consolidated Consolidated Non-Consolidated Consolidated 30.0 31.1% 2.5 (Consolidated) 25.0 2.0 1.9 Times 20.0 (Non-Consolidated) 28.7% 1.5 15.0 (Non-Consolidated) 1.0 10.0 1.6 Times 0.5 (Consolidat

32. Slide 32: Reference Data (2): Management Information

    03 Reference Data (2) : Management Information Copyright © CHUBU Electric Power Co.,Inc. All Right Reserved.

33. Slide 33: Schedule of the Electricity System Reform

    27 Schedule of the Electricity System Reform ْSchedule of the Electricity System Reformٓ Schedule for Schedule for implementing the measures Enacted the bill 3rd phase: Enacted on Further securing the neutrality of the power transmission/distribution In April 2020 June 17, 2015 sector through legal

34. Slide 34: Initiatives of JERA <1>

    28 Initiatives of JERA <1> „ JERA will expand business based on investment profits from each business and profits generated from the optimization of the value chain. ¾ We will divide the value chain from the securing of interests of energy resources to procurement, transportation, gas supply and pow

35. Slide 35: Initiatives of JERA <2>: Type of business

    29 Initiatives of JERA <2> : Type of business 岧Fuel business (upstream, procurement, transportation, trading)岨 Optimum portfolio is create using the world’s largest procurement scale and trading, and fuel procurement that can flexibly respond to change of business environment in the future is realiz

36. Slide 36: (Reference) Overseas IPP and Fuel projects of JERA Group

    30 (Reference) Overseas IPP and Fuel projects of JERA Group (As of April 2017) Canada • Goreway Gas Thermal IPP Netherlands • Rietlanden Coal Terminal Oman US U.A.E. • Sur Gas Thermal IPP • Tenaska Gas Thermal IPP • Umm Al Nar Gas Thermal IWPP Taiwan • Carroll County Gas Thermal IPP India • Chang Bi

37. Slide 37: Sales Strategy <1>: Optimum proposal of gas & electric power

    31 Sales Strategy <1> : Optimum proposal of gas & electric power „ We arranged seven gas tariff menus, i.e. the KatEne Gas Plan for households and the BizEne Gas Plan geared toward businesses. They have been set at prices lower than the gas tariff menu offered by Toho Gas. Prices will be lower than

38. Slide 38: Sales Strategy <2>: Gas sales framework

    32 Sales Strategy <2> : Gas sales framework „ In 2001, Chubu Electric Power launched a natural gas sales operation geared towards large factories, harnessing its own pipelines. The company has since then been taking incremental steps to strengthen and expand its gas business. „ We started to sale ga

39. Slide 39: Sales Strategy <3>: Electricity sales in the Tokyo metropolitan area

    33 Sales Strategy <3> : Electricity sales framework in the Tokyo metropolitan area ْElectricity tariff menu in the Tokyo metropolitan area (KatEne Plan) ٓ ⋇ Top-class low price ¾ Discount rate is 5-10% (KatEne point included) compared with TEPCO Energy Partner’s existing menu. Features ⋈ Benefit ari

40. Slide 40: Sales Strategy <4>: Enhancement of points of contact with customers

    34 Sales Strategy <4> : Enhancement of points of contact with customers ٛLow voltage ٜ „ Various services with high added values that contribute to convenient and comfortable life as “daily-life coordinator” are developed and provided. ٛHigh voltage嵣Extra-high voltage ٜ „ Total energy solution is pr

41. Slide 41: Hamaoka Nuclear Power Station <1>: The state of Power Station

    35 Hamaoka Nuclear Power Station <1> : The state of Power Station „ For Unit 4, application for review for checking conformity to New Regulatory Standards was submitted on February 14, 2014. For Unit 3, application for review for checking conformity to New Regulatory Requirements was submitted on Ju

42. Slide 42: Hamaoka Nuclear Power Station <2>: Progress of NRA review

    Hamaoka Nuclear Power Station <2> : Progress of the Nuclear Regulation 36 Authority’s review to verify compliance with the New Regulatory Standards „ As to Unit No.4, the application form for Change in reactor establishment permission that we submitted has been reviewed by the Nuclear Regulation Aut

43. Slide 43: Hamaoka Nuclear Power Station <3>: Seawater inflow via damaged tubes

    Hamaoka Nuclear Power Station <3> : Seawater inflow via damaged tubes 37 in the main condenser for Hamaoka Reactor No.5 ْFactٓ - On May 14, 2011, when preparing for cold shutdown after reactor No. 5 was suspended, a portion of the tubes in the main condenser, through which seawater flowed to cool st

44. Slide 44: Hamaoka Nuclear Power Station <4>: Dialogue with local residents

    Hamaoka Nuclear Power Station <4> : 38 Activities to take part in dialogue with local residents „ On the Hamaoka Nuclear Power Station, we have been steadily promoting further safety measures including facilities measures and disaster prevention measures together with gaining public understanding as

45. Slide 45: Composition of Power Sources and Electric Power Output (FY2016)

    39 Composition of Power Sources and Electric Power Output (FY2016) „ Based on energy mix of Japan, aim for optimum composition of power sources by combining various types of power source, such as nuclear power, thermal power and renewable energy, in a well-balanced manner from the standpoint of “S+3

46. Slide 46: Responses to Global Warming: Reduction of CO2 emissions

    40 Responses to Global Warming ~ Reduction of CO2 emissions ~ „ In order to achieve the target value of the country’s CO2 emission rate in FY2030 through voluntary frameworks structured in the entire electric utility industry, take various actions such as making thermal power facilities highly effic

47. Slide 47: Renewable Energy <1>: Our efforts toward promotion

    41 Renewable Energy <1>: Our efforts toward Promotion (As of the end of March, 2017) Development locations of hydroelectric power station (Reference)Chubu Electric Chubu Electric Conventional hydro Group Generation with minimum water level operating 196 Site : 5,450MW Akigami : 0.29MW(FY2016) Parent

48. Slide 48: Renewable Energy <2>: Actions for expansion of renewable energy

    Renewable Energy <2>: 42 Actions for expansion of introduction of renewable energy „ To realize energy mix of Japan, take actions for expansion of introduction of renewable energy such as efforts for adjusting supply and demand in a wide range for change of output of renewable energy and efforts for

49. Slide 49: Reinforcement of the Frequency converter (FC)

    43 Reinforcement of the Frequency converter (FC) „ In order to stably supply electricity when power outage occurs in a wide range due to stoppage of large-scale power source, efforts will be made to increase FC by 900 MW to a total of 2,100 MW in FY2020 so that lending of electricity between regions

50. Slide 50: Reinforcement of business foundation utilizing ICT

    44 Reinforcement of business foundation utilizing ICT and expansion of business areas „ ICT such as IoT, big data and AI will be utilized for reinforcement of business foundation, and examinations will be made for provision of new services. ْMain efforts utilizing IoTٓ Power network Communications n

51. Slide 51: Disclaimer

    DISCLAIMER This presentation contains assumptions and forward-looking statements with respect to the financial conditions, and forecasts of the company, which are based on information currently available. These assumptions involve certain risks and uncertainties, and may cause actual results materia

52. Slide 52: Copyright © CHUBU Electric Power Co.,Inc. All Right Reserved.

    Copyright © CHUBU Electric Power Co.,Inc. All Right Reserved.

Chubu Electric Power Company — FY2016 Earnings Presentation on 6ix